Commission investigates airline merger

The European Commission is to investigate low-cost airline Ryanair’s proposed takeover of Aer Lingus, it said in a statement today.

The planned acquisition had been the subject of preliminary inquiries by the Commission since it was notified of the move on 24 July and its “potential competition concerns” are now sufficient to trigger a formal in-depth investigation.

The Commission said: “Ryanair and Aer Lingus are the main operators out of Dublin airport. On a large number of European routes, mainly out of Ireland, the two airlines are each other’s closest competitors and barriers to entry appear to be high.

“Many of these routes are currently only served by the two airlines. The takeover could therefore lead to the elimination of actual and potential competition on a large number of these routes.”

The Commission has until 14 January to reach a decision on the issue.Ryanair – whose existing 29.8% stake in Aer Lingus is already being investigated by the UK’s competition commission – was prohibited from buying out its fellow Irish airline in 2007 when the Commission ruled that it was anti-competitive, a decision upheld by the European Union’s General Court three years later.

A second attempt by Ryanair to take over Aer Lingus was notified to the Commission in 2009 and subsequently withdrawn.

Today, the Commission said: “In comparison with the situation in 2007, when the Commission adopted its decision, the number of routes where both Ryanair and Aer Lingus operate has increased.”